🌎 UAE Mandates Risk Disclaimers for Crypto Firms Starting October 1

The United Arab Emirates’ Virtual Assets Regulatory Authority (VARA) has introduced a new rule requiring crypto firms to add disclaimers warning potential customers about the risks associated with investing in digital assets.

New Marketing Guidelines for Crypto Firms

Starting October 1, companies that want to market their digital assets in the UAE must include a disclaimer stating, “virtual assets may lose their value in full or in part, and are subject to extreme volatility.” This move aims to ensure that investors are fully aware of the risks involved.

In addition to the disclaimer, companies that offer incentives for virtual assets or related products must acquire a compliance confirmation from VARA. This means they must prove that the bonuses or incentives will not be used to mislead investors about the risks associated with the investment product.

Building Trust and Transparency

VARA Chief Executive Officer Matthew White emphasized that “providing clear and actionable guidance” is essential for building trust and transparency among virtual asset service providers operating in the UAE.

Dubai: A Hub for Crypto Marketers

In recent years, Dubai has emerged as a favorable city for crypto marketers, thanks to its crypto-friendly tax regulations and substantial venture capital investment opportunities. A report by Bitget research revealed that by 2024, an average of 500,000 crypto traders will reside in the Middle East, with the number expected to reach 700,000 by the end of the year.

Landmark Developments in the UAE

Last month, a landmark Dubai court ruling recognized cryptocurrency as a valid form of payment under employment contracts. This decision marks a significant step forward in the acceptance and integration of digital assets in everyday transactions.

In October 2023, the UAE launched RAK Digital Assets Oasis, the region’s first economic free zone dedicated to cryptocurrency, web3, blockchain, and artificial intelligence. This zone offers a business-friendly regulatory environment with tax benefits, attracting numerous companies to set up operations.

As of March 2024, over 100 entities had received licenses to operate in the RAK DAO, including Indian crypto exchange CoinDCX.